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Sunday, November 16, 2008

Small Business



Being labeled a “small business” may convey the impression that a business is unimportant and not valuable. But, are you realize among small businesses, there is great diversity in size. For instance, Pelita Nasi Kandar, one of the most popular “Mamak Restaurant” who offered Nasi Kandar to Malaysian especially at Penang. Even though, this restaurant some sort likes small business. But, they have a lot of branches around Penang and also Kuala Lumpur. Believe or not? 

 THE POWER OF 'SMALL BUSINESS'

A lot of economist agreed that small business has historically been the backbone of the economics success all around the world. Small business today continues to play a dominant role in the ability of the nation to quickly adapt and to make economic progress. The development of small business also helps drive the economic success of communities, regions, and entire states. As a result, civic leaders, increasingly look to small business as a means to promote economic strength. 

When small business exist at one area or location, this able generating new employment, providing a growing tax for the country and at last in also give the contribution to the country.. The success of this area will also encourage other areas to promote entrepreneurship and small business to a much greater degree. 

 According to, Bamford and Bruton, 2005, small business also acts as a catalyst for the societal change in other ways as well. Small business also has the ability to garner profits in markets that have been ignored by large corporations. For example, the famous place especially in the mind of women at Negeri Sembilan is Nilai 3 and Nilai 1. This is because of Nlai 3 and Nilai 1 offered the varieties of fabric and also cloth. Why this place is very popular and a lot of visitor from others states come here especially in the weekend.

Are you believe? There also have package from tour agencies that offered Nilai 3 and Nilai 1 as one of the place to visit. As a result, the existence of Nilai 3 as a centre of fabric and cloth acts as a catalyst for societal change. For instance, it encourage their society to participate and involved in small business likes restaurants and also food stall. Small business the urban area also meets the varied demands that face individuals in the society. 

 For instance, small business in the new developed area also need small business such as retail shops, restaurants, tuitions center, car wash, car workshop, hardware shops and so on. I believe that starting a small business able to meet the needs and wants of the populations live in that area. I also believed that, large corporation may not able to do in order to meet the need and want of urban or new developed areas. So, entrepreneurs also helps to improve the lives of others people through the new products and services that they bring in the market. 
The owner of small business are also involves in donating substantial portions of their wealth to eminently worthy causes. For instance in Islam, Muslim have to pay their zakat called as “business zakat”. As a result, small business not only provides valuable benefits such as profit to the small business manager but also to the society. The development of one country also has the impact from the existence of small business. That’s the power of “Small Business”.
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Saturday, November 15, 2008

Ideal Time or Age To Become Entrepreneur


Starting any type of business career is exiting. Launching one’s own business, however, can be absolutely breathtaking of the extreme risk and great potential in such a venture. Let’s we all think for a moment the factors related to readiness for getting started as entrepreneur. Do we know the characteristics that most commonly associated with successful entrepreneur? What about 10 myths of entrepreneurship? Let’s learn before getting started!

IDEAL TIME OR AGE TO BECOME ENTREPRENEUR.

The most common question that people always asked is “what is the right or ideal age to become an entrepreneur?” There is no simple answer to this question. I’m also faced with difficult situation to answer this question that supported by relevant reasons. Therefore, to answer this question I’m really agreed with the opinion from Longenecker, Moore and Petty (2004) in their books Small Business Management, An Entrepreneurial Emphasis.

Most businesses require some background knowledge. It is not only in term of formal knowledge some sort like formal education. It also can be gain from the informal education such as your experience also can be classified as knowledge. Are you agreeing? In addition, most prospective entrepreneurs must first build their financial resources in order to make the necessary initial investment. I’m agreed because of I’m experienced it.

In lately 2003, I excited involved in one business that using the Multilevel Marketing (MLM) system. I believed to sharpen your skill of business it can demonstrate it in MLM business approach. A lot of people believed that MLM can be classified as the lower risk of business. It also not necessary to have lot of financial or startup cost. But, you also have to given your money in order to be the members of that company. So, it is also need your money or financial resources in order to make the necessary initial investment. Am I right?

Never the less, certain amount of time is usually required, therefore, to gain education, experience, and financial resources. Normally, young people are discouraged from entering entrepreneurial career by inadequacies in their preparation and resources. On the other hand, older people who have developed family, financial and job commitments that make entrepreneurial career seem too risky. They may have acquired interest in retirement programs or achieved promotions to positions of greater responsibility and higher salaries. We called it as people in the comfortable zone. They are not more too motivates with the incentives or rewards as entrepreneur.

Therefore, the ideal time for entrepreneurship, appears to lie somewhere between the mid-20s and mid-30s. At this time, it is a balance between preparatory experiences on the one hand and family obligations on the other. I’m also conducted a survey to all my friend and also colleague. I’m also found that the highest percentage of startup is in the 25 to 35 year age group. Some 50 to 60 years old walk away or are not too interested and excited to become entrepreneur because they are already in comfortable zone.

So, answer already about the ideal age for entrepreneurship that appears to lie some where between the mid-20s and the mid-30s. Anyway, I’m also believed some of teenagers and older age can start their own firm. Now, think about it and let’s getting started if you ready to get your feet wet in entrepreneurial water.


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Rewards of Entrepreneurial Careers


What might cause you to think about operating your own business? Why a lot of people excited to be as entrepreneur? Why also our governments encourage Malaysian to be entrepreneur? Some are especially attracted and pulled toward entrepreneurship by number of powerful incentives or rewards.

Longenecker, Moore and Petty (2003), grouped into three basic categories: profit, independences, and personal fulfillment.

Make Money (Profit)

Like any other job or career, entrepreneurship also provides for one’s financial needs. Starting one’s own business is a way to earn money. Indeed, some entrepreneurs earn lots of money. Islam also encourages Muslim to involve as entrepreneur. Prophet Muhammad (p.b.u.h) said that business is 90 % from sources or rizki. Profit motive is one reason, although not only reason, for operating one’s own business.

The financial return of any business must compensate its owner for investing personal time (a salary equivalent) and personal saving (an interest and/ or dividend equivalent) before any true profit are realized. Therefore, entrepreneurs should expect a reward turn that will not only compensate them for the time and money they invest but also reward them well for the risks and initiative they take in operating their own business. Indeed, some profit is necessary for a firm’s survival.

Some entrepreneurs, no doubt, are highly motivated by the prospect of profits. They have heard the stories about people who are involved as entrepreneurs became millionaires. They also have heard the stories about successful businessman and businesswomen who lived in the prestigious life.

Independences (Be Your Own Boss)

Owning a business provides entrepreneurs the independence and also the opportunity to achieve what is important to them. Freedom to operate independently is reward for entrepreneurs. Longenecker, Moore and Petty (2004), in their book identified that thirty-eight percent of those who had left jobs at other companies said their main reason for leaving was that they wanted to be their own boss. Like these entrepreneurs, many people have a strong desire to make their own decisions, take risks, and reap the rewards. Being one’s own boss seems an attractive ideal.

Entrepreneurs in general appreciate the independence inherent in their chosen careers. They can do things their own way, reap their own profits, and set their own schedules. But, remember independence does not guarantee an easy life. Most entrepreneurs work very hard for long hours. But they do have satisfaction of making their own decisions within the constraints imposed by economic and other environment factors, including undesirable working conditions. This situation normally we called as the refugee. Refugee mean that a person who becomes an entrepreneur to escape an undesirable situations. Of course I’m agreed!

Enjoy a satisfying Life (Personal Fulfillment)

Entrepreneurs frequently speak of the satisfaction they experience in their own businesses; some even refer to their work as fun. Part of their enjoyment may derive from their independence, but some of it reflects an owner’s personal fulfillment in working with their own firm.

The role of entrepreneur in even a one-person business can often bring to an individual a sense of dignity or significance that makes life worth living. Enjoy a satisfying life may derive from a pleasurable activity, from enjoyable associations, from respect in the community, or from some other aspect of the business. For many entrepreneurs, the life satisfaction they receive is much important than money or independence.

SUMMARY

The study of entrepreneurship and entrepreneurs has relevance today, not only because it helps entrepreneurs to better fulfill their personal needs, but also because of their contribution it gives to the individual, society, country and to the world. Through the evolution of entrepreneur can wined our scope about entrepreneur.

This chapter also examine the entrepreneurial opportunities and also to give better understanding about the concepts of entrepreneur and entrepreneurship in our daily life. In addition, three basic rewards or incentives likes: profit, independences, and personal fulfillment can motivated us to be one of the entrepreneur.
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What is Entrepreneurship?



What is Entrepreneurship?

According to Knight (1921), entrepreneurship as a profit from bearing uncertainty and risk. Schumpeter (1934), define as carrying out of new combinations of firm organization – new products, new services, new sources of raw material, new methods of production, new markets, new form of organization.

Cole (1959) defines as purposeful activity to initiate and develop a profit-oriented business and McClelland (1961) entrepreneurship just the moderate risk taking. Stevenson, Roberts, and Grousbeck (1989) defined as the pursuit of opportunity without regard to resources currently controlled and in 1995, Hart, Stevenson and Dial were improve this definition to be entrepreneurship as the pursuit of opportunity without regard to resources currently controlled, but constrained by the founders’ previous choices and industry-related experiences.

According to Histrich and Peter (1998), entrepreneurship is the dynamic process of creating incremental wealth. The wealth is created by individuals who assume major risks in terms of equity, time, and career commitment or provide value for some product or service. It is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychological, and social risks, and receiving the resulting rewards of monetary, personal satisfaction and independences.

In the 21st century, Kuratko and Hodgetts (2004) have define entrepreneurship is a dynamic process of vision, change, and creation. It requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions. Essential ingredients include the willingness to take calculated risks in term of time, equity, or career; the ability to formulate an effective venture team; the creative skill to marshal needed resources; the fundamental skill of building a solid business plan; and finally, the vision to recognize opportunity where others see chaos, contradiction, and confusion.

Now, what conclusion can we draw from the definitions of entrepreneur above? Although each of these definitions views entrepreneurs from a slight different perspective, they all contain similar notions. If we examine the common elements from all definitions, we might find the following characteristics:

o Creativity and innovation
o Resource gathering and the founding of an economic organization (wealth)
o The chance for gain (or increase) under risk and uncertainty.
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Who are Entrepreneurs?




Who are Entrepreneurs?

There have been as many definitions of entrepreneur as there have been writers on the subjects. Kirzner (1979), define entrepreneur is more than just a risk-taker and innovator. He or she is the one who sees the future that no one else has seen and, if this perception is correct, bring about a reordering of resources to produce greater consumer satisfaction and technological efficiency.

Scarborough and Zimmerer (1998), he define an entrepreneur as a person who creates a new business in the face of uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them. Entrepreneurs usually start with nothing more than an idea, often a simple one, and then assemble the resources necessary to transform that idea into a sustainable business.

According to Longenecker, Moore and Petty (2003), they defined as those individuals who discover market needs and launch new firms to meet those needs. They are also risk taker who provides an impetus for change, innovation, and progress in economic life.

Kuratko and Hodgetts, (2004), define an entrepreneur as one who undertakes to organize, manage and assume the risk of a business. The entrepreneur is also a catalyst for economic change who uses purposeful searching, careful planning, and sound judgment when carrying out the entrepreneurial process. Uniquely optimistic and committed, the entrepreneur works creatively to establish new resources or endow old ones with a new capacity, all for the purpose of creating wealth.
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Entrepreneurship Evolution at Malaysia

Malacca Historical City

 Entrepreneurship has existed since Malacca has interaction with foreign traders especially from Arab and China. When British colonized the Malay Peninsular, they changed the structure of the society and practiced the “divide and rule”. In this system, Malays were engaged in administration and agricultural, Chinese were engaged in mining and business, and the Indians were engaged in rubber plantations. As a result of this system, until today Chinese society was far ahead in business at Malaysia.


After independences, Malaysia Government realized the importance of entrepreneurship not only to individuals, but also to society, country and also contribution to the nation. The New Economic Policy (1971 – 1990), the National Development Policy (1990 – 2000) and Vision 2020 are examples of government has been focusing, encourage and support entrepreneurship at Malaysia until today.

Government realized that entrepreneurs can contribute the development of the country. Therefore, in 1995 government incorporated the Ministry of Entrepreneurship Development as a specific body to manage and promote the growth of entrepreneurship at Malaysia. Today, this ministry recognized as the Ministry of Entrepreneurship Development and Co-operation (MeCD).

Entrepreneurship and small business is growing faster every year. Therefore, number of individuals and also students who have chosen to be entrepreneurs increased substantially. They involved in various business such as restaurants, retailer, construction, agricultural, transportation and other business.
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Entrepreneurs and Entrepreneurship



INTRODUCTION

Welcome to the world of entrepreneurship and small business! At one time or another, I believe many people reflect on the possibility of some day operating their own business. This because of entrepreneurship and small business is growing faster in recent year. Over the past few years, the number of individuals and also students who have chosen to be entrepreneurs increased substantially.

ENTREPRENEURIAL OPPORTUNITIES.

An entrepreneurial and small business opportunity is more than just a good business idea. A lot of people, and also entrepreneurs have interesting ideas all time. They are more focuses on concepts for new products, ingenious technologies, and inventive services. But, is it really the entrepreneurial opportunities? This is because of the major difference between a successful and unsuccessful venture is often the difference between intriguing business idea and a truly promising opportunities.

Therefore, an entrepreneurial opportunity can be describe as the desirable and timely innovation that creates value for interested buyer and end users. In other word, it is need to know and understand the customers or target market so well that the product fits and sells itself. Clearly, successful entrepreneurs pursue opportunities by first identifying value-creating innovations entrepreneurs pursue opportunities by first identifying value-creating innovations with market potential. Great ideas alone are simply not enough.

It is also important to note, however, that a given opportunity will be not equally attractive to everyone. This is because of differences in experiences, knowledge, information and also perspective, one person may see an opportunity where others do not. Anyway, in order to see an opportunity and also grab the opportunity exist only for the entrepreneur who has the interest, resources and capabilities that required to succeed as entrepreneur. Remember the magic word, “see and grab the opportunity!”

THE EVOLUTION OF ENTREPRENEUR.

World Evolution

The word entrepreneur is derived from the French entreprendre, meaning “to undertake”. This is refers to individuals who undertake (the risk of new ventures). In the simple word, to be entrepreneur they should start with the word “T R Y” (Take Risk, Yes!). Don’t be afraid if you failure in the journey to be entrepreneur. Remember, the history of discoveries which have benefited mankind is often filled with people who try to use erroneous or failed ideas as stepping stones to new ventures. “Entrepreneurs take the possibility of failure in their stride”.

Peter Drucker, an authority on management theory, noted that although the term entrepreneur has been used for 200 years, “there has been total confusion over the definition.”

In the earliest period, Marco Polo who attempted to establish trade routes to the far East as early example of the earlier definition of an entrepreneur. Marco Polo would sign a contract with a financier (capitalist) to sell his good. In this situation, the capitalist was a passive risk bearer. Marco Polo took the active role in trading, bearing all physical and also emotional risks. Once, the merchant adventurer had successfully sold the good. Profit would be divided the capitalist and the merchant-adventurer likes Marco Polo.

During the middle ages, the scopes of entrepreneur are wider to describe both an actor and also person who were in charge of and managed large productions. The entrepreneur in this age was the person who was in charge of great architectural works such as public buildings and cathedrals. That’s why at this age person who called entrepreneur who were charge and managed large productions that resources provided by government.

According to Joseph Schumpeter, an earlier written on the subject, Richard Cantillon first used the term circa 1755. Cantillion, a French economist, asserted that entrepreneur invests, transforms and makes either profit or loss. He reviewed the entrepreneur as a risk taker. They also include merchants, farmers, craftsmen, and other sole proprietors. It’s mean that the scope of entrepreneur become more complex.

After 21 years in 1776, Adam Smith widened the scope of entrepreneur to include the task of forming an organization for commercial purposes and the extra qualities of this person called enterpriser. He described the dynamism of that personality such as the ability to foresee potential through changes in the economy, and to act on the demand thereby created.

When the industrialization that occurred throughout the world at around 18th century, the capital user also called as entrepreneur. The capital user likes innovator who many of the inventions developed during this time such as Thomas Edison who are not venture capitalist or providers. It’s mean that the function of the entrepreneur is to reform or revolutionize the pattern of production by exploiting an invention. As a result in the middle of the 20th century, the notion of an entrepreneur as an innovator was established.

According to Kuratko and Hodgetts in 2004 he said, today many people regard entrepreneurship as “pioneership” on the frontiers of business. It’s mean that entrepreneur in the 21st century, are considered as the heroes of free enterprise. This is because of many of them have used innovation and creativity to build multimillion-dollar enterprises from fledging businesses.

As a conclusion, entrepreneur plays a large and increasing role now days in our nations and also our individual working lives. They involve in several area either as capitalist, merchant adventure, risk taker either farmers, craftsmen, or other sole proprietors. They also can be the enterpriser who has the ability to foresee potential through changes in the economy, and to act on the demand thereby created. Lastly, the innovator also we can call as the entrepreneur.
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